To that end, I have turned my attention to the core economics of the situation.

I have taken the existing Federal Minimum Wage (for those who can work) and tweaked it with a formula (based on existing government guidelines) that ensures that if a person puts in 40 units of work in a week , they will be able to afford basic food, clothing, housing, (utilities included) public transportation and access to the emergency room, wherever that work is done throughout the United States.

This will end homelessness for over 1,000,000,000 people instantly and prevent economic homelessness for all 20,000,000,000 minimum wage workers (immigrants included.)

In my third book, Livable Incomes: Solutions that Stimulate the Economy, I deal with the Prevention of Homelessness. This includes fixing the Supplemental Security Income (SSI) for those who cannot work. From my perspective, looking at our capitalistic society the economy is paramount. This enables us to meet people’s basic needs.

People can either work or they can’t. At the lowest level, The Federal Government has set two standards: the Federal Minimum Wage for those who can work and SSI for those who cannot work.

Not surprisingly, the National Conference of US Mayors has said that a full time minimum wage worker cannot get into and keep (over time) a one bedroom apartment anywhere in the US. That wage is $7.25 per hour. The SSI stipend for people who cannot work is about half of that failed amount at $4.22 per hour.

Our approach to fixing this problem is different than that being promoted by the President (one size fits all) in that we recognize that we are a nation of a thousand plus economies. As a result, our formula indexes to the local cost of housing. In this fashion, if someone puts in 40 units of work (be it from one job or more) they will be able to afford the basics in life…food, clothing and shelter as outlined.

We have addressed the SSI standard in a similar fashion.

Since we devised our formula in 1997, the United States Military has converted its pay system to encompass our tenet of “Geographic Considerations” and changed from VAH, Variable Housing Allowance to BAH, Base Housing Allowance. Since then, the federal Government has similarly created “Locality Pay,” so that when people are transferred to a more expensive area, they are compensated.

Now it’s just, We The People, who are not supported this concept. As a result, 3.5 million people will again fall out of the work force and into homelessness again this year.

For the Christian Science Monitor, staff writer Schuyler Velasco compiled a list of the American corporations where the yawning abyss between CEO pay and employee pay is most apparent. For every dollar the average McDonald’s employee makes, CEO Donald Thompson takes home 1,196 of them. How is it possible that any human being’s time is worth more than a thousand times as much as the time of another human being?

Existential questions aside, McDonald’s is the most egregious example of ridiculously munificent executive compensation, followed by Starbucks and Dollar General. Among the top 10, the least discrepancy is found at AT&T, where the biggest boss makes only 558 times the wage of an average worker.

Ratcheting up Salaries

For Dissent Magazine, Colin Gordon explains the process of deciding how much to pay a bigwig. A show of detached neutrality is made by deferring to the wisdom of a “compensation committee.” The members are other bigwigs with similar job descriptions. Next week, one of those execs will be up for a raise, and guess who will be on his compensation committee? That’s right — the very same guy whose salary he is deciding today. Gordon says:

These compensation committees […] have perfected a machine for ratcheting up executive pay. As a general rule, CEO pay is calculated from a benchmark of peers. The result is a lucrative game of leapfrog. The selection of peers is arbitrary — and often consists of cherry-picking larger and successful firms with higher-paid executives.

In effect — with very limited input from shareholders and no demonstrable connection to firm performance — top executives set their own salaries.

Shareholders Lack Clout

Supposedly, performance-based pay is subject to shareholder approval, and a reasonable person might ask, “Why don’t they take charge, and rein in these greed-heads?” But as it turns out, the deck is stacked. The system contrives to make shareholder influence largely theoretical. Their role is purely advisory and the corporation doesn’t have to do what they recommend.

For a giant business with high-powered lawyers on retainer, it is very easy to circumvent any rule. The corporate entity can hide, even from its own stockholders, exactly what is going on, in what Gordon calls “a concerted effort to camouflage the level and terms of executive pay packages with various forms of stealth compensation (such as lavish retirement deals) or rigged performance measures (such as stock options).” Even worse, there are two classes of shareholders. Gordon says:

Increasingly, shareholding is dominated by the block holdings of big institutional investors (mutual funds, pension funds, and the like). And many public firms use ‘dual class’ shares to distribute voting rights more narrowly than stock ownership.

Stockholding citizens, even the most socially conscientious, have very little clout. And what do the execs get paid for? Who knows, but it’s a pretty sure bet they are not busy figuring out how to reduce the income gap, and pay enough so that none of their employees need to apply for government relief.

Universal Living Wage

Eleanor Bloxham, CEO of The Value Alliance and Corporate Governance Alliance, believes that a company should be transparent about whether it pays a living wage to every person who works for it. For a recent Fortune CNN article, she quoted House the Homeless President Richard R. Troxell about the Universal Living Wage concept, so please go and take a look.

Also, please remember Economic Gap Day is coming up on Tuesday, September 2. Everyone is urged to organize or join a demonstration in a highly visible public place. Check out this video of a past Economic Gap Day to catch the vibe:

The Universal Living Wage means basic food, clothing, shelter (including utilities), public transportation, and access to an emergency room! This must be the minimum standard for every American and all people.

The Beatles, Frank Sinatra, and Bill Clinton had all stayed at the Shoreham. With 1,000 people in attendance, it still felt as if it was nowhere near capacity. The excitement and energy level was palpable. The din was almost numbing as we waited in line and slowly worked our way to the security checks. The president of the United States was coming! But the “participants,” as the name badge around our necks stated, were perhaps more excited that Gloria Steinem, Nancy Pelosi, and Michelle Obama were also scheduled speakers. The original title of the conference, White House Economic Summit on Working Families — which is what attracted me — had now been converted to the White House Summit on Working Families…after all, this summit was about families.

Gloria Steinem, celebrated feminist, spoke to the importance of women in the workplace when she shared the European Union’s plan to legislatively ensure that every Board of Directors be comprised of 40% women by 2020. She pointed to studies that show that the presence of women in business settings introduces compromise and increased business productivity.

Business leaders such as Sheila Marcelo, CEO of Care.com, informed us that in three states child care now costs more than state college tuition.

Speaker after speaker echoed themes that called for paid maternity leave, flexible work hours, wage equality, and comprehensive health and child care.

Congresswoman Pelosi declared, “The bottom line is, 21st century families deserve 21st century workplaces, and Congress should pass the Pregnant Workers Fairness Act and increase opportunities for American workers.”

Vice President Joe Biden shared the major sacrifices of his wife, Dr. Jill Biden, who helped him raise children after his first wife was tragically killed in a car accident shortly after Biden’s election to the U.S. Senate. He spoke adamantly about the role of “family” in all of our lives and the need to make major changes designed to support the structure and enhance all of our families.

President Obama also spoke of the many sacrifices of his mother as a single parent. He let it be known that she did whatever she had to do to provide for her family, including accepting food stamps. He went on to talk about the importance of minimum wage workers. He spoke of his proposed increase in the current $7.25/hour minimum wage to $10.10/hour. He said that 28 million people would benefit from his proposed increase to the Federal Minimum Wage.

I learned that, following the general group session, the Breakout Session on Hourly Workers would be held in the Ambassador Room. I located the room and placed my prepared documents about the Universal Living Wage on each of the yet-to-be-filled 450 seats where participants would get their marching orders on the proposed $10.10/hour minimum wage. I returned to hear the last of the morning speakers before people moved to the breakout sessions.

Not one to leave anything to chance, I again left the morning session and checked on the documents that I had left just minutes before on the chairs. They were gone! I had previously befriended a media person who had been setting up equipment. He directed me to the person, Bill Flanagan, who had removed my documents. I confronted him, got his identification and my documents back. He said that they “had not been authorized by the White House.” He worked for the Center for American Progress Action Fund. I took my documents and returned later for the breakout session when I planted myself in front of the audience microphone.

When I finally reached the microphone, I shared with the people that in 2006, Beth Schulman, author of The Betrayal of Work, stated that “people are no longer using minimum wage jobs as stepping stones, but rather they are remaining in those jobs for ten years or longer and being forced to try and raise families on that wage.” I told the audience that:

$10.10 = “Old Thinking!”

We are a nation of over a thousand economies. One size does not fit all! If the goal in raising the Federal Minimum Wage is that we cross the Federal Poverty Guideline and escape poverty, but the raised amount is always less than the amount needed to reach that goal line, then how will we ever escape poverty? We won’t. “Something is better than nothing” is not true if we are forever economic slaves and if that approach also attacks small businesses. Business benefits from labor. They should pay “a fair wage for a fair day’s work” but not suffer for it.

Instead, we must index work to the local cost of housing, so that a person can afford the basics in life, wherever that work is done throughout the U.S. (without ending up living on our streets).

I then told them that I was embracing common sense and that today I had come with a solution that will fix the plight of minimum-wage workers/families across America!

Universal Living Wage

I explained that the Universal Living Wage uses existing government guidelines that ensure that if a person works 40 hours in a week (be it from one job or more), he or she would be able to afford basic food, clothing, shelter (including utilities), public transportation, and access to emergency rooms, wherever that work is done throughout the nation. This will end homelessness for over 1 million people, and prevent economic homelessness for all 20 million minimum-wage workers. It will stimulate the national housing economy, save billions in taxes, and stabilize small businesses across America.

Several speakers behind me then stepped to the microphone and asked, “Why are we were not demanding a Living Wage approach?” The sound of their questions faded in my ears as I stepped out into the hallway and proceeded to hand out information about the Universal Living Wage to the rest of the “participants.”

“You have not converted a man because you have silenced him.”— John Morley, 1st Viscount of Blackburn

The Federal Minimum Wage has slipped into distinct disrepair. The historical one-size-fits-all approach, be it $7.25 per hour, or even the proposed $10.10 per hour, is antiquated. Our national economy has evolved into a thousand-plus economies. We’ve all traveled, and we all know that the cost of living in Washington, D.C., is different than it is Austin or in Harlingen, Texas, etc.

At long last, there is talk of indexing the Federal Minimum Wage (FMW) to the cost of living. This would make complete sense if the wage had enabled minimum-wage workers to afford life’s necessities to begin with. But, until that piece of the puzzle is fixed, the proposed cost-of-living increase only addresses the inflation aspect of the wage. The core wage itself is still too little to enable people to afford the basics of life: food, clothing, and shelter.

To solve the failings of the FMW, we must index it to the local cost of housing, as it is the single most expensive item in the budget of every American. The failure of the FMW is that it is creating homeless people. But by indexing to the local cost of housing, we account for the nationwide variation in local economies without crushing small businesses in rural America. This will ensure that if a person works 40 hours in a week, be it from one job or more, they will be able to afford basic food, clothing, and shelter (including utilities) wherever that work is done throughout the U.S. This will end economic homelessness for over 1,000,000 minimum-wage workers.

— by Richard R. Troxell, from a recent letter to the editor at The Austin American-Statesman

House the Homeless is a powerful presence in Austin, Texas. The nonprofit organization and its president, Richard R. Troxell, are constantly at the forefront of the effort to help everyone have a good and productive life. Richard holds the invincible belief that America could end homelessness within its borders, and the only thing standing in the way is the lack of political will to do so.

As always, at the top of the list is the need for a living wage indexed to the local cost of housing, one that covers (at very least) the necessities of shelter, food and clothing. He is convinced of the necessity to change two federal standards, the minimum wage and Supplemental Security Income — which means businesses taking care of the people who work, and SSI taking care of people who can’t work.

On the local level, plenty of progress could be made right now by adopting the policy of “Discharge No One into Homelessness,” which would apply to every institution — the military, hospitals, the foster care system, the prison system and so on — and ensure that no one leaving any of those places would be ejected into the streets.

House the Homeless released the report entitled “Prevent Homelessness at Its Core: 10-Year Plan to End Homelessness, Restore Human Dignity and Save Business and Taxpayers $ Millions!” This White Paper was sent to the President and First Lady, all the members of the U.S. Senate and House of Representatives, and many governors, Cabinet members and other influential people.

Additionally, when funding is acquired, the plan is to send it to every mayor in the country. They are the ones responsible for building shelters in their towns, and making laws that apply to people experiencing homelessness. They are the ones who have to deal with their local hospital emergency rooms being filled with homeless people who have no health care alternative. Hopefully, individual mayors will petition the Conference of Mayors to do something, and the Conference of Mayors will petition Congress for relief in the cities. If only 14 mayors (just 1% of their number) would speak up, that would make a significant difference.

Speaking up

Richard has been a staunch voice every time a journalist needs perspective on such things as an apparent hate crime or a renewed effort by the city to make the lives of homeless people more miserable. Recently, he wrote:

Our nation is relying on an all-volunteer military to protect the people of this nation and maintain the stability of the entire planet. We have failed to protect the protectors. In so doing, we have disgraced our nation and failed our Veterans who have selflessly sacrificed everything to ensure our freedom. House the Homeless calls for a full scale Congressional investigation into all allegations of mismanagement, abuse and neglect. The entire VA Disability program needs to be investigated by the United States Attorney General and placed in Special Receivership.

Strong words! Why would he say that? Among other things, remember the gigantic backlog in processing all veterans’ disability claims? If not, please review “Homelessness and the Disabled American Veterans Agenda.” Recently, we looked at the situation in Austin, thanks in part to the journalistic enterprise of Jeremy Schwartz of the Austin American-Statesman, which resulted in Bell County hiring a veterans services officer decades after the law required it. Why did it take a national scandal to implement this?

What Higher Minimum Wage Does for Workers and the Economy

Honest economists such as Federal Reserve Chairman Ben Bernanke have haltingly told the truth on the question of whether raising the minimum wage adversely affects the employment rate: “My response is that I think it doesn’t lower employment.”

Additionally, study after study has shown that 98% or more of all minimum wage increases have been directly spent back into the local economy, thus acting as a local economic stimulant.

Unfortunately, the “Fair” Minimum Wage Act falls short, would hurt small businesses in rural America, and maintains a repressive wage system that would keep workers in a state of poverty throughout our nation.

First of all, how long would it take a worker to climb out of poverty if every step he or she took was less than the distance to reach that poverty goal line? The answer is FOREVER. They would never get there. That has been the Congressional response to minimum wage worker needs for decades. The mantra has been, “Well something is better than nothing.” Clearly, that is not true if our path to escape poverty is forever blocked.

The failure of the Federal Minimum Wage (FMW) has manifested itself as 3.5 million workers falling out of work and into homelessness every year for the last 20 years. The single most costly item in the budget of every American is housing. That is why the Universal Living Wage campaign, since 1997, has chosen to index the FMW to the local cost of housing across America.

Unfortunately, the “Fair” Minimum Wage Act fails to to recognize that we are a nation of 1000+ separate economies. Everyone else knows the cost to live in Washington, D.C., is different from living in Harlingen, Texas, or Fort Lauderdale, Florida, or Santa Cruz, California. ONE SIZE DOES NOT FIT ALL! Let’s imagine the “Fair” Minimum Wage Act becomes law and the national standard becomes $10.10 per hour. This will not get one homeless minimum-wage worker off the streets of Washington, D.C.! At the same time, this will hurt small businesses in rural Fargo, North Dakota, and Cumberland, Maryland, and Erie, Pennsylvania.

By using the formula of the Universal Living Wage — using existing government guidelines to index the FMW to the local cost of housing — we ensure that a person working 40 hours in a week (be it from one job or more) will be able to afford basic food, clothing, shelter (including utilities), public transportation and access to a hospital emergency room.

One of the basic ideas this document embraces is that homelessness is way beyond just needing to be “dealt with,” it must be prevented. The great American philosopher Henry David Thoreau said, “There are a thousand hacking at the branches of evil to one who is striking at the root.” Hold that thought, because we will return to it.

Sue Watlov-Phillips, who authored the “Overview” section of the whitepaper, speaks of the media-nourished stereotype in which the lack of a place to live is a problem exclusively owned by the individuals who experience homelessness. This is reminiscent of the bad old days when the racial situation in the United States was characterized as “the Negro problem.”

Eventually, thanks to the actions of countless thousands of courageous people, the so-called Negro problem was correctly identified as a societal problem. Watlov-Phillips writes:

As long as we continue to blame people experiencing homelessness on their individual problems […] it allows us as a society to not address fundamental structural issues in our society that is creating and maintaining homelessness for millions of our people in this country and allows the general society to identify people experiencing homelessness as ‘those people’ instead of our people.

What are the roots of homelessness?

In other words, what are the roots of homelessness? They are embedded, Richard R. Troxell tells us, in two major trenches. One major crisis is that almost no one makes what could fairly be called a livable incomeany more. If that is not sufficiently obvious in our own lives, we can look to the media for such spectacles as the recent public relations disaster perpetrated by McDonald’s. The corporation’s suggested employee budget not only contained ridiculous expenditure figures, but took for granted that it’s normal for an American to hold down two jobs, just to live one life.

When a person is able to work, is paying them a living wage such a wild idea? When a person is not able to work because of disability, is improving the Supplemental Security Income (SSI) system such a crazy notion? Richard shows how these two things can happen, and illustrates the benefits to both business and taxpayers.

The other relentless contributor to homeless statistics is the ease with which people slip through the safety net, so thin and frayed as to be nonexistent in places. The whitepaper identifies several ways this rupture of the social fabric could be repaired so people stop falling into the abyss. Richard says:

The paper also looks at the concept/tenet: Discharge No One into Homelessness. This is the idea that at no time do we know as much about an individual as when they enter one of our Institutions… Therefore, we should begin to prepare for their eventual discharge into a safe housing environment, immediately.

In the recent past, House the Homeless has examined these institutions in depth, one by one. In a civilized country, the very notion of anyone being discharged from a hospital back onto the streets could make a grown man cry. Young people who already suffer from multiple disadvantages are released from the foster care system into oblivion. Far too many veterans, quite likely to be physically or mentally disabled, are denied the care that was promised them and that is owed them, and abandoned to their fates.

But that’s not all

Of course, there are many other routes to homelessness. An unbelievable number of Americans have lost their homes to the banks. It is worth noting that Sue Watlov-Phillips co-authored Foreclosure to Homelessness: The Forgotten Victims of the Subprime Crisis. In 1983, she founded Elim, the Minneapolis institution that focused on locating transitional housing in duplexes and apartments, rather than shelters. She is also a practicing psychologist, political activist and Board Member Emeritus of the National Coalition for the Homeless.

The other major participant in the creation of the whitepaper is Professor Edgar Cahn, who wrote the Preface. A very condensed version of his distinguished biography includes these phrases:

A graduate of the Yale law school […] started his career in government as special counsel and speechwriter for Attorney General Robert Kennedy… [F]ounded the Citizens Advocate Center… [F]ounded the Antioch School of Law… National Legal Services program… Time Dollar Youth Court…

Of the various genres of people experiencing homelessness, former prisoners are most difficult for the average housed American without a criminal record to sympathize with. But it doesn’t matter how anyone feels about it. The cold, hard fact is that America’s prison population has been artificially and outrageously inflated for the sake of corporate profit, and the more people are caught up in it, the worse everything is going to be for everybody.

Read all of “Prevent Homelessness at its Core — The Universal Living Wage (for dramatic business savings)”or even just the Executive Summary… Tell everyone you meet that we must attack homelessness at its roots by preventing it! You can find the document in its entirety by clicking here or below.

Tony Polombo is a columnist who, like Richard R. Troxell of House the Homeless, believes that a living wage is not the same as a minimum wage. They won’t be the same until the minimum wage is such that anybody who puts in a 40-hour workweek can afford food; clothing; safe, decent, basic housing (including utilities); public transportation; and access to the emergency room. A living wage, as its name implies, is one that a family can actually live on, not merely subsist or exist.

Some say that raising the national minimum wage would cause companies to lay off workers, and then unemployment would only increase. To them, Polombo makes this interesting point which is imbued with a dark and terrible humor:

As the many workers who are now doing the work that two or more other workers used to do can tell you — employers in general are already hiring the least number of employees they can get away with.

He brings up arguments of a kind that, due to a shortage of common sense, are not often heard. Check this out:

The US already has de facto living wage laws in the form of government safety net programs such as Food Stamps, the Earned Income Tax Credit and Medicaid… But critics have (rightly, in my view) charged that government programs such as these are little more than corporate welfare…

You would think that the anti-government Tea Party types in Congress would want to eliminate much of the need for these government programs by making corporations pay their full share of a living wage…

Citizens who work for slightly more generous corporations all chip in via their income taxes. Then the government has money to help other workers who labor for the cheapskate corporations, so their employees can afford the necessities that ought to be covered by their paychecks but are not. Voila! Corporate welfare!

You can call it anything you want, but that doesn’t change the fact. Speaking of cheapskate companies, Polombo says:

The award for corporate chutzpah goes to McDonald’s who in a campaign aimed towards its workers, tries to convince them that it is possible to work a minimum wage McJob and still live comfortably — if only they would budget their money properly! They support this by a sample budget that apparently assumes a worker has a second job along with Food Stamps to pay for food and almost no expense for health insurance. Unbelievable!

Polombo is not the only journalist having a good time bashing McDonald’s and wondering, incidentally, what planet those people are from. For ThinkProgress.org, Annie-Rose Strasser gave the sample budget the once-over and called it “laughably inaccurate”:

Not only does the budget leave a spot open for ‘second job,’ it also gives wholly unreasonable estimates for employees’ costs: $20 a month for health care, $0 for heating, and $600 a month for rent. It does not include any budgeted money for food or clothing.

Actually, this would explain why no money is allotted for heating. A person with two jobs is never home to need the heat turned on, and can sleep wrapped in a Mylar space blanket which is available for quite a reasonable price at the surplus store, where they are sold for the convenience of mountain climbers who might get caught in blizzards. Strasser goes on to say:

For an uninsured person to independently buy health care, he or she must shell out on average $215 a month — just for an individual plan… If that person wants to eat, ‘moderate’ spending will run them $32 a week for themselves, and $867 a month to feed a family of four. And if a fast food worker is living in a city? Well, New York City rents just reached an average of $3,000 a month.

And here is a question. Considering that this phantom budget was concocted by McDonald’s with the help of Visa — what about credit card bills? Many Americans pay huge amounts of interest every month to credit card companies, and not always for luxuries and frivolities. And people, yes, even fast-food employees, have student loans to pay back. And where is the item for child care, for which anyone with one or more children and two jobs will at some point have to pay? Even a doting grandma needs a $20 tucked into her apron pocket every now and then.

But there is no point in nitpicking, when the basic assumption of the budget — that everybody should work two jobs — is so blatantly unacceptable. The only upside is that employees can, as comic Stephen Colbert suggests, go to both employers’ Christmas parties and surreptitiously fill their pockets with buffet food. That may get them through the holiday week, but what about the rest of the year? And how many McDonald’s executives work a second job? What planet are these people from, anyway?

Fought for by President Franklin D. Roosevelt 1938 — 25 cents, which would be more than $4 now

In 1974 — $2 per hour

Now — $7.25

Proposed by President Barack Obama in State of the Union Address — $9.00 per hour

How much it would need to be, if equivalent in spending power to 1974 — $9.31 per hour

These are a few of the pertinent facts presented by Angelo Young for International Business Times, before going on to demolish several anti-minimum-wage arguments. He quotes Roosevelt’s 1938 speech:

Do not let any calamity-howling executive with an income of $1,000 a day, who has been turning his employees over to the Government relief rolls in order to preserve his company’s undistributed reserves, tell you […] that a wage of $11 a week is going to have a disastrous effect on all American industry. Fortunately for business as a whole, and therefore for the nation, that type of executive is a rarity with whom most business executives heartily disagree.

Strong words! Young says:

It’s not likely that the debating points will change under Obama’s call to pass wage-increase legislation. His proposal to link the federal wage increase to the rising cost of living will definitely be met with Roosevelt’s ‘calamity-howling.’

What with one thing and another, the minimum wage topic did not, for a while, reside on the front burner of the national stove. That there should even be a minimum wage is still not an idea espoused by all, but as House the Homeless discussed last week, acceptance has made great strides.

It’s a debate that has been in progress for 75 years, and the last 39 years have been especially rough, cost-of-living-wise, Young says, and adds:

[…] [W]ages have not kept up with America’s cost of living, making it more difficult for the working, taxpaying bottom-bracket earners in this country to pull themselves up by their proverbial bootstraps […] working Americans in lower income brackets who live paycheck to paycheck, where any fluctuation […] means much more than just canceling premium cable subscriptions.

Sen. Warren probably is referring to [a] study by the Center for Economic and Policy Research that showed what the minimum wage would be if it had kept up with increases in worker productivity… The study […] talks about average productivity. Average workers do not earn the minimum wage. This study does not track changes in the productivity of workers who make at or below the minimum wage. Isn’t it possible that the largest increases in productivity have been among more skilled employees who already earn above the minimum wage?

This is not exactly an anti-minimum-wage argument, but Freakonomics co-author Steven Levitt has an interesting take on it. In The Huffington Post‘s capsulization of his recent Q&A session via Reddit, Levitt says:

Honestly, I don’t think the minimum wage matters all that much to the economy.

Why? Because relatively speaking, the number of minimum-wage workers is small, with about 5.2% of hourly workers making the minimum or below. The article notes:

Some studies have reinforced President Barack Obama’s argument that raising the minimum wage would boost the economy. Raising the minimum wage by $1 would give households comprised of minimum wage workers $2,800 per year more to spend, according to a 2011 study from the Federal Reserve Bank of Chicago cited by CNN.

There is a corny but true parable which has many versions. This one one was adapted by the Starfish Greathearts Foundation:

An old man had a habit of early morning walks on the beach. One day, after a storm, he saw a human figure in the distance moving like a dancer. As he came closer he saw that it was a young woman and she was not dancing but was reaching down to the sand, picking up a starfish and very gently throwing them into the ocean.

‘Young lady,’ he asked, ‘Why are you throwing starfish into the ocean?’

‘The sun is up, and the tide is going out, and if I do not throw them in they will die.’

‘But young lady, do you not realize that there are miles and miles of beach and starfish all along it? You cannot possibly make a difference.’

The young woman listened politely, paused and then bent down, picked up another starfish and threw it into the sea, past the breaking waves, saying, ‘It made a difference for that one.’

It’s not accurate that only 5.2% of workers would benefit from a minimum-wage raise. There is more to it. But putting that aside, even if the lives of only 5.2% of workers were improved, like the starfish, it would make a difference for them.

Apparently, the Dallas legislature does not want Texas municipalities, Austin-led, to require companies to pay “living wages.” The federal minimum wage is $7.25/hour, but Austin, like the federal government, has now plucked an imaginary number out of the air and dubbed it a “living wage” at only $11.00/hour. For the moment, let’s put aside the issue as to whether or not a municipality should be able to exercise its power position of employer to extract better wages for its employees.

To be clear, $11/hour is not a living wage.

A living wage is an amount that ensures that a person working 40 hours in a week will be able to afford basic: food, clothing, shelter (including utilities), and public transportation. In Austin, it is $13.10/hour. This is calculated by using a 40-hour-a-week job, spending no more than 30% of one’s income on housing ( a national banking standard), and HUD’s Section 8, Fair Market Rent Formula. It is also calculated based on the cost of an efficiency apartment in Austin, which is $681 on average.

To pay a lower wage can result in economic homelessness. At this pay scale, 3.5 million people will again face homelessness in our nation this year.